US resident becomes defendant in theft of 195m tons of oil from Russia organized by Khodorkovsky back in 2003

US resident becomes defendant in theft of 195m tons of oil from Russia organized by Khodorkovsky back in 2003
Pavel Ivlev

Pavel Ivlev is accused of misappropriation or embezzlement of someone else's property on an especially large scale and legalization of money or other property acquired by a person as a result of committing a crime.

Tomorrow Khamovnichesky Court of Moscow will start proceedings in absentia in the case of former Deputy Executive Partner of law firm ALM Feldmans Pavel Ivlev. At one time he was a defendant of the "big YUKOS affair," but following materials concerning the lawyer were severed since he managed to flee for the United States. The Investigative Committee of Russia (ICR) charges Ivlev with the appropriation of more than 195 million tons of oil belonging to YUKOS subsidiaries as part of an organized group led by Mikhail Khodorkovsky. The investigation estimates the damage from these actions at 1.067 trillion rubles ($17.3bn).

Preliminary hearings on Pavel Ivlev's case are scheduled for Thursday in Khamovnichesky court, according to the law, they will be held in a camera. State prosecution and defense will have the opportunity to file motions.

Lawyer Konstantin Rivkin, who represented the interests of Pavel Ivlev during the preliminary investigation, remarked in an interview with Kommersant that the outcome of this trial would not affect the fate of his client in any way.

"Pavel Ivlev left Russia when he was a witness in the case, and immediately left for the United States, where he had his own house," Rivkin said. "There he first received a residence permit and then obtained citizenship. Therefore, when the Russian Prosecutor General's Office demanded his extradition to his homeland, it was denied." According to the lawyer, Interpol refused to declare Pavel Ivlev internationally wanted, finding his case to be "political." "Consequently, my client could safely move around the world except for the CIS and Russia," said the defender.

According to Rivkin, the case of Pavel Ivlev was separated from the "big YUKOS affair," initiated in 2003. "This is an eternal case, in which many have hyped themselves and received promotions," said the lawyer. "And given that it is also win-win, the investigation decided to win new laurels on it."

Pavel Ivlev is accused of Misappropriation or Embezzlement on an especially large scale (Art. 160 of the Criminal Code) and Legalization of Monetary Funds or Other Property Acquired by a Person as a Result of an Offence Committed by Him/Her (Art. 174.1 of the Criminal Code). According to the investigation, between 2001 and 2002, Pavel Ivlev, as part of an organized group created and helmed by Mikhail Khodorkovsky, participated in the theft of over 195 million tons of oil from YUKOS subsidiaries - Yuganskneftegaz, Samaraneftegaz and Tomskneft VNK. The total amount of damage from criminal transactions with oil, according to the calculations of the ICR, amounted to at least 1.067 trillion rubles ($17.3bn). At the same time, according to the investigation, about 133 billion rubles ($2.1bn) of this sum was legalized.

As stated in the investigation materials, the members of the criminal group bought oil from oil refiners at cost and then resold it several times more expensive. At the same time, the oil producing companies did not receive any profit, and purchase and sale transactions were made through firms located in tax havens. The gain was also transferred to offshores, where it was later legalized under the guise of transferring dividends to companies Nassaubridge and Dansley Limited, whose accounts were opened in DIB and MENATEP-SPb banks. Incidentally, in the framework of the criminal "YUKOS affair," the affected oil companies filed a civil suit against all the accused of 398.9 billion rubles ($6.4bn).

The role of Pavel Ivlev, the investigators believe, boiled down to providing legal support and the appearance of legal purity of all these transactions. He never acknowledged either any claims against himself or a charge in absentia. "I consider them absurd and senseless," he says. Earlier, the lawyer clarified that "with unbiased justice, it would be enough to merely prove that in the case of YUKOS there was no theft of oil from its mining companies." "Firms registered in tax havens, which the investigation calls the shell, took oil from YUKOS subsidiaries not for free, but transferred money to YUNG, Samaraneftegaz and Tomskneft VNK for each delivery," he explained. "And they even received profit from transactions with the mentioned alleged shell companies. It is no mere chance that the Federal Tax Service, revealing similar schemes of tax ‘optimization’ at TNK, Sibneft, and LUKOIL, limited itself to recovering delinquent taxes and fines from them, while the Prosecutor General's Office did not classify their actions as stealing oil from their subsidiaries."

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